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tv   On the Move  Bloomberg  November 20, 2014 3:00am-4:01am EST

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bothered the fed is not bothered apparently. on the u.s. economy they say it would be quite limited. dax futures where are we? up eight points. manus cranny with the opening. dollar-yen. >> quite frankly i was more interested in norwegian krone. this is one of the most private trades in the world but let's look at dollar-yen. 118.58.- not being flippant but when there is this huge momentum shift one has to question how they deal with the movers. they actually said the euro-dollar would hit parity
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that is more of a shocking call myself. reflecting back on where to put your money whether in the united states of america or indeed in asia, we just had a conversation with admin chang and it is still a hard market to choose. referring dollars as the global currency of choice. equity is part of the sentiment, france, germany likewise. the u.k. retail sales will come out of the warm weather that we are having here in the netted kingdom, how will that impact sales. a couple individual names, i wonder if arm is actually moving. the ceo making comments last 1.24%,there you go, up
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in theory more dividends to come. those are comments from the ceo. let's have a little bit of a look at some of the other individual names. this was for the technology outage, rbs out west. 6.5 million customers in 2012, they have cut their earnings-per-share and this is all to do with the weather. using our heating much. it lowers their , originally-share they said 21 pants on the earnings-per-share, mild weather and the margins fall by 4%. senkrupp,roop -- first annual profit in four years. caroline will run you through that. they still have to break even
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before they managed to sell that again. work, manus cranny. that is the market open. the big news out of france, we will get you those pmi's, manufacturing in at 47.6, services in at 48.8 and that is a very slight beat. 38.4 is also on this, wherever you look at it forget the estimates that it is firmly in contraction territory. we are joined by stephen jones the chief investment officer and he looked at more than 50 billion pounds in assets great to have you with us. manufacturing, contraction services and territory again it does not look pretty for france. >> i think that is a pattern
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that has been well-established over the last couple of quarters and without france coupled up driving europe than europe as a whole suffers. picture is one that has caught the attention of the ecb and we can't forget that action has been taken by draghi in the council. some of to to affect the weakness. >> this is the number two economy in the eurozone, germany not doing much better how do you investor on this? >> cautiously is the way we would invest. basis it is very clear that europe is not the place to be at the moment. you can pick up some value out
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of european stocks, especially some of the dividend payers and the reliable income which has been supported but geographic basis clearly they are better off elsewhere. >> where is that 50 billion at work? >> it is at work in markets rather than cash. we think cash is a very expensive asset class to hold. there are still six income markets despite some of the doomed stories around that asset class. >> where are the opportunities in fixed income, .8% in germany and even france around 2%, where are the opportunities? >> you are right to highlight the expensive government bond markets but there is something to be said there. we do not see central banks raising rates anytime soon and ,n that sort of environment
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they still represent a positive return. there inopportunity fixed income is a run credit investing and we still think there is value in investing great credit and there are better quality names that could add some value. >> a lot of companies come and issue euro evaluated debt and the yields are low, where is the opportunity? >> the opportunity is relative to cash. you are in an environment where we believe central banks and even in the u.s. are far more advanced in other parts of the global economy that are not going to raise rates for another year. environment some areas of the credit market are still a valuable investment opportunity. that is just the u.s. leading
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the interest rate charged in a year time. we are still in an easing cycle in europe with negative rights being plied on cash deposits now and also a central bank that looks set to do more in terms of buying assets and bonds and buying credit potentially. even here in the u.k. everyone pushing back there forecast, the bank of england pushing back to the fourth quarter. back threeng it quarters. we are looking at china after the manufacturing data there disappoints, a lot of speculation about what the people's bank of china might do, we will talk more about the fed after the break with stephen jones. century cut its full-year profit outlook, what does the market
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do? 1.34%.own we will break down the statement after the break. ♪ >> welcome back i am jonathan
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ferro live from the city of london. let's get straight to business
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and talk about the fed. the federal reserve minutes were released yesterday evening with little excitement. from reading to the details there certainly did not seem to be much of a fight put up over ending quantitative easing. they were showing reluctance to acknowledge it in the statement because it may implied -- it may imply they caved more than they did. cared more than they did. >> let's bring back stephen jones the chief investment officer at kane's capital. the fed has a track record and that is one of being over optimistic. trot,ing global back limiting impact on the u.s. economy, do you agree with that? >> i think the fed recognizes constantly that the majority of the u.s. economic activity and their jurisdiction is domestically focused.
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it is not despite having a global influence a globally engaged economy. occupy the majority of the fed's mind. in that context it is quite sensible that the 15% was externally influenced and perhaps being slightly detrimentally affected. just a weakening in global growth. it isn't that much of a concern at the moment. of the backdrops is the decline in oil price. and saidhrough them that may offset the strength of the dollar on the currency side. how much of a boost is that? two things about oil, it will challenge them quite hard on their inflation target in the near term. we'll see the numbers out later today and cpr reacts quite
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ignition only -- significantly to some of the oil prices we has seen coming through and that pushes a profile lower into the end of the year and gives the fed more scope to keep rates lower for longer in our view. think that on a two or three inflation returns toward the target. they're quite comfortable to take the short-term falling inflation to help stimulate the u.s. economy. , you can gets real varying estimates of how much money the u.s. spends on gasoline but it is certainly over $500 billion. that is coming off 10 to 15%, prices at the pump having fallen is a significant and immediate tax cut and pushing to the consumer and smaller meeting businesses. that reinforces the fact that growth in the u.s. will continue to be strong and slightly above trends.
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the fed actually quite likes that situation. andet's talk about markets where you put the money, the previous meeting before october there was an acknowledgment of a stronger dollar and what it could mean and they have dropped that concern this time around. for me that means it is a free pass for the dollar-euro to shoot high and the dollar-yen to shoot low. elsertainly like everybody , and this is a slight concern, dollar assets are a tractive. economic the fundamentals but from the currency strength it is a symptom of the strong economic fundamentals. we continue to run with that into the end of the year. strong,ar is uniformly the yen is the poster child of how strong the dollar is coupled with the domestic assets in the japanese state to depreciate and
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devalue their currency to help their own situation. the dollar is strong across the board and significantly across emerging-market currencies as well. we cannot ignore that as an investor and we have to sponsor it. >> final question for you, as i woke up and did my reading, i ran across problems interrupting from solutions. sitting in front of me talking about the fed and saying lower for longer and then we talk about the dynamic in the credit markets that central banks will state easy and get back in there, what is the endgame? is -- the ende game is a. we are not too hot and not too cold economic growth. leveries that can do and where companies can
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continue to make money and in central banks, i would pass that on with employment growth and when that definitely figures in a lot of the rhetoric from all central banks that need labor to be engaged and are gently inclined to participate in the fruit of economic recovery. a tight rope that they are walking, it always is but in my opinion there probably doing quite well at the moment. to beenough growth realistic and supportive of credits and investment opportunities and securities markets. andhreat of inflation interest rates that may stay lower for longer. thet's funny that we use word goldilocks because without being confrontational it probably belongs in books. stimulus and low rates and we are still not in a position where we can have a 25 races point rate hike.
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what makes you think that in the next 12 months things will change. -- change? >> the fact that this has been , and on for five years certainly this is an economy that has seen some reform of the youing system in the u.s. have seen a combination of central government spending alongside economic recovery has produced good growth, good employment with unemployment having fallen from 7% down to 6% in the u.s., it seems to work. there is a fascination in markets that once to see central banks fail and they are determined not to and will continue to pursue growth and employment aggressively. >> we have to leave it there, thank you for joining me. stephen jones of keynes capital.
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the french seismic oil, a natural gas field rejected an offer of eight euros point -- 8.35 euros per share. low.said the offer was too the french government owns stakes in both companies. see cg up 22.48%, technet -- technip down 6%. tyssen from the ceo of krup, it reports its first profit in four years. ♪ >> welcome back to "on the move
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." i am jonathan ferro live from london. arm holdings plans to transfer more cash to shareholders in the next five years. they are helping company boot sales faster than rivals, and arm will increase dividends and possibly engaged and share buybacks. british regulators put up millions of pounds for a computer class and two dozen 12, that left millions of customers without access to their accounts for weeks. the ceo said the bank will invest 700 50 million pounds over three years to improve the system. yahoo! is replacing google as the default search engine on firefox rousers in the united
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states. the ceo is looking for a way to bolster yahoo!'s search business. shares rose in extended trading on the news. resumed raiment of dividends after reporting its first rough in four years. lou burke spoke with the ceo early this morning and started by asking him about the company's recovery. are clearly proud that we have achieved that milestone that we could achieve a net income of $195 million and based on that we can pay dividend to our shareholders. >> what is your dividend policy going short -- forward. at said you are paying out .1 111 euros per share, what is your policy going forward. that have not decided on one but we intend to pay a
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dividend because we want to give a strong signal to our shareholders that we care about them to receive money and that it showed our confidence that future earnings will calm. what we are focusing on right now is to further lift our profit levels and that was the reason why we have outlined the running business year that we will lift our profit to at least 1.5 billion euros. >> can you give us an idea about the long-term goal? you said you're hoping to reach at least 2 billion euros in the longer term, can you give us an idea of how long it will take? know, we do not intend to finalize the precise year because the paces defined by the market environment and we have growing uncertainty and can not clearly commit to a date but it should demonstrate that we came 1.3 this year and gave an
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outlook that we will surpass 1.5 billion next year and we went to give a clear signal to our shareholders that we will not rest and we know very well that the level of 2 billion euros is what we need to be able on a solid basis to generate net income and free cash flow and from that point onwards state a clear dividend policy. it should be a signal that we clearly have understood where we need to go. thyssenkrupp it on now, joining us now caroline hyde. the aim to diversify, how is that going? >> this country that has two sentries history making steel now only gets 28% of its profits from still making. this is what the chief executive has been doing, selling off assets. sold off their plant because it cost them $9 billion
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in write-downs and losses. they are trying to exit the brazilian plant also and get out a stainless steel operations but it is all about slimming down and focusing on the higher profitability areas. units,ial car component those elements is where the money is. earlier quizzed the ceo and said would you get out of steel altogether? >> that is what the analysts are starting to look at the said we to not weighted to -- wedded our history of steel but we are not getting out of it for free. only oneunit is the bringing an a lot and everything else is turning a profit. >> investors put the stock up thist 3% and there is fuzzy term of corporate culture, what are they trying to do? company that has to
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separate itself from its history because it has been illustrious for the past 200 years and in the short-term it is very bad. since the financial crisis we cut whatrices falling also hurt the company was corruption investigation and what the ceo called an old boys network. he said i was amazed how much i had to radically change the corporate culture. i have ended their shooting lodge police, you cannot now negotiating here. why going to steal if you cannot shoot here? suites andexecutive all of this has been hemorrhaged off. it is not the only company doing it in germany, a lot of them are exiting vineyards and the like that this is the area that they are focusing on. they have raised the compliance officer to the executive board. >> we will keep it on
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commodities because coming up after the break we are going to talk oil as investors anticipate and opec production cut next week. a quick look at the market, back in two. ♪ >> welcome back to "on the move
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." i am jonathan ferro 30 minutes into your trading day. we are lower across the board the 5100 down by lower. ofaking news, emi out germany they are a mix. coming in at 50 flat, 51.5 was the expectation, that was the survey number. in expansion territory. 54 .0,iss as well,
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disappointing data out of germany but at least it is expansion territory. the french manufacturing shrank more than expected meaning hopes for an economic rebound and the next quarter could be short-lived and early this morning we're looking at chinese factory data and it unexpectedly fell to a six-month low in november. the managing index on hsbc came in at 50.0 flat, below the median estimate of 50 point two and down from last month's 60.4. disappointing data out of china, france, germany equity across the board. caroline hyde is here with the stocks to watch. john, you are not painting the prettiest picture and i will show you a stock that is painting a slightly rosier one. rants that is all about temporary hiring.
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randstad is all about temporary hiring and in fact permanent placement fees up 21% they are managing to see a ramp up of hiring. good as looking just as october, an interesting in terms with branstad of hiring. just to warm fort centrica, the british gas odor all about energy in the u.k., the profit warning lowers its full earnings are the year. -- for the year. tough trading conditions at , and 2015 they say it will be to off because oil prices fell low. just talking about the expiration of reduction will not look too pretty but they see revenues improving but centric a ica down on the
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fact. are seenhile casino we such a flurry of their shares this year but in the united states you saw casino selloff some of the shares it owned in an e-commerce company. andeally is worldwide shares sold at half the price were they had been marketed. seven dollars a pop per share and they marketed them anywhere up to $14. a raised just shy of $200 million but 36% lower. casino with a kick in the teeth. back to you. headlines, the top the minutes from the u.s. federal reserve meeting reveals little debate about ending the historic quantitative easing
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program, the october meeting focused on whether the fed should communicate more of their views about the pace of interest rate increases next year and they also said the impact of headwind abroad may be limited to the u.s. of economy. 9.6%, handily at 4.5 analyst estimates percent and rising to its highest level since 2008. the spanish recession last quarter. in the u.k. voters go to the polls. at 7:00 u.k. time and closes at 10:00 p.m. pending ands are results expected early tomorrow morning. all eyes are on opec ahead of its meeting next week. enough to act? what are we expecting from the meeting? prices you look at oil
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for the last five days a does not seem to be a lot of direction and that is because there is no consensus when it comes to what opec is going to do when they meet thursday. the analyst we talked to our split down the middle when it comes to whether they will cut or maintain the status quo. one of the key countries to watch is saudi arabia and the one with the most fair capacity out of the producers, they cut prices which would suggest they would not support a cut that they have been very quiet and there has been a lot of shuttle diplomacy of other is a third diplomacy,an keep -- there is a third path, you can keep prices but there has been a lot of cheating. morgan stanley says they think there is a two in three chance that opec will do one of those three things. it will either cut production which would have a more dramatic effect or it will simply agree to follow the production quota,
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30 million barrels that they agreed to which would have perhaps a little bit more reserved affect but might push prices up. >> when i look at opec's own target exec we how far are they exceeding their targets by? >> there is more cheating then rule following if you well. we took a look at what production has actually been versus what it was supposed to be over the last six years since 2008 and you will see that they have been cheating right throughout. if you look on the right hand side of the chart that redline indicates falling demand, a third line if you will. you would hope when you have falling demand there would be more discipline and people would be more inclined to follow the rules because they would want to support the rice with the rules they agreed to and they have not. if you look at libya their
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production is down 50%, iran down by a quarter. given that they were not able to produce as much as they were originally allowed to, unlikely to agree to a cut or follow the rules going forward. watch what happens on thursday and watch what the production target is but also have a good think about how many of those countries are going to follow through. trading at $78 per barrel and a lot of people sitting at home hoping it stays there. we will be live next week from opec in vienna. we speak to the ceo of the world's second-biggest staffing company about the employment situation in europe and what that means for the company. returns. "on the move" a drop in the dax in the last 15
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minutes down 7/10 of 1%. pmi in germany really disappointing. in expansion territory but only just. and services data data out of germany for the month of november is disappointing, adding to concerns. china overnight also posting some week economic data. picture in europe, we will back in two. stay with us. ♪ >> this is "on the move." the
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dutch staffing group posted growth in revenue in november. a different story in france which was down by 4% in the same time. was one of the biggest graphics for revenue in 2013. joining me now is the ceo and chairman of randstad, jack van den brook. let's start with the good news. revenue up 4%, are you happy man? >> i am a happy man this morning. i am dutch so inherently whenever. in many markets that is against the market because europe is still not flourishing
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economically. deliberately targeting the fixed placements. tell mee, the showing the u.s. economy is doing well and labor markets are doing well you're one of the companies knee-deep in that market how well is it for you? asis doing really well and you mentioned are staffing up 3.4, wethe market up are even better than the market. we talk about gross profit development and gross profit growth in any business line it is about 5% in -- 5% to 7%. >> that is the fluffy, rosie stuff. the third quarter trend continues into the fourth quarter that is not always good. france and germany showing signs of a slowdown, is it continuing to slow for you? >> it is a different picture,
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france inherently as a country is sluggish and has been all throughout the year. we start of the you're not great and it has been like that, having said that we also take the liberty choices. we could grow and be better but then we need to make unprofitable business which we are not prepared to do. having said that in france the business we do favor, in-house business, business with permanent placement companies also do really well. economically i am not that optimistic. germany is a slightly different picture and we were still growing at the beginning of this down ever sorailed slightly throughout the year and we think it is a mix, exports going down, automotive's very important in germany and the geopolitical tension and the ukraine is very close to germany and has led to consumer confidence going down. it bogs down our business. >> when i look at france and the reforms and
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structural reforms, for someone that operates there and runs a company that operates there, what are the kind of things that need to happen to make your life easier? >> if you compare france to frain -- spain things of happened which is toning down the cost of labor, and france growth wages are pretty high internationally but then what comes on top? social premiums and taxes which is way too high to compete. there,ope we do not go they ever formed and we do see that spain is now a competitive in the european landscape. we do see many moving from belgium into spain. that game needs to change. having said that i met with the prime minister and they are very easier forng life
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companies to perform in france and let's hope they get there because it is a tough infrastructure, the unions -- >> any sign of improvement in france? they can talk about it a lot, have they done anything for you? >> they have done things for us so we were lobbying for what we call flex and security, being able to put terms on our own payroll and give them more training. that is happening. it is possible to get temporary work into the government, not happening but from a legal point it is happening or did inherently it will take time. >> people outside this company whether they hold the stock or not be thinking about wages. is there that much capacity that we can forget wages picking up any time soon? >> i think that depends on the job you are in, definitely in jobs, science, engineering and manufacturing it
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then high-level engineers we do see scarcity. there is still a lot of demand for engineers and there we see wages going up. we do see it in the blue-collar environment which we don't see picking up. >> just to talk about the easy ecb, weming out of the have analysts here and they say investing companies with strong dollar revenues, does that translation affect back into europe and it will boost profit, you have strong dollar revenues how much has it helped you? >> it doesn't really matter because in a way we translate it back to a euro result, if the euro goes up then our top line looks great but then our costs look worse so on average it translates back and forth. we do not have to hedge anything so in essence it doesn't mean that much to us. thoughts to get your
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on the anti-establishment movement in the political world that we are seeing right now. for a man with business across the eurozone you see the rise of the far right in france and sec political evolution is that a concern in the eurozone? >> when you talk politics that is not so much my concern what is a concern is another movement which we see in germany and the netherlands and that they say flexibility is not a good thing, freelancers is not a good thing. we say you need flexibility to compete within europe compared to other parts of the world that you need to have it well regulated. bog downa tendency to and push down on flexibility and then it will be fixed jobs. we have research this scientifically and you give us jobs disappearing and being automated or you see bad flexibility, not well regulated
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flexibility. in germany the country is becoming more flexible from the end of the 80's to 2010, flexibility was a big part of that and i used to the social democrats trying to push it back. when you look at the eurozone economy and labor markets, is that the main driver of performers to your business right now? isthe driver in the u.s. economic growth and the whole setup of the legal framework has not changed that much. whereas in europe our sector is far more regulated and we do see a trend that is very consistent, if a labor market is rigid it will hamper economic growth. ven den broek, thank you very much.
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not performing as well as daxstad unfortunately, the up by one half of 1%, down by 50 points. disappointing data out of germany, disappointing data out of france. of slowest pace manufacturing growth in 16 months. the data signals growth in europe could remain sluggish. plenty to discuss, we will do that and more. ♪ >> welcome back to "on the move
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." the german still maker posted its first rough it in four years, that is after it sold a u.s. plant which had lost almost 14 billion euros in profit value. salafi could get 2 billion in new drugs, and they could get approval for as many as 18 products between now and 2020. fiat chrysler will debut a new alfa romeo in june and aims to sell 400,000 by the end of 2018. part of a newly merged company
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with growth set to run through 2018. alibaba warned that his company is facing its most dangerous moment. market the book may be expecting too much from the giant. shares have surged 60% since the record ipo in september. working at steering them into new areas such as digital entertainment and health care. by guy johnson, you have a headline at about 8:30 u.k. time >> we have a -- what? >> german pmi. >> i am in the wrong hour. german pmi was weak and the french pmi was week. at the top of the hour we will get the aggregated number. point we will put the finishing touches on what has been a fairly difficult day.
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>> think people were excited after the zew, if you look at the currency markets and people did not react and what was funny was that nobody reacted to the french data out which was weak and they were for the german numbers and it is the german number that seems to be the biggest swing factor in europe. that german number continues to be pretty pivotal. we will have analysis on that. >> france is firmly into traction in germany flirting with contraction. it does not look like that is happening at this stage. look at russia and the effect of that has been clearly demonstrated and you are pointing out to me that the euro-dollar is not having the big impact we at hoped it would have. i've had several executives sit in front of me and say it is not a big benefit for us, even though we have 20% of revenue
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coming from the states. >> that is a slow point and maybe it is a slow burn, a minute by minute process not a week by week, month by month story, maybe it will come through. maybe they are looking for an argument to drive that european valuation story you make a fair point that i don't think it will have the dramatic affect some hope it will what the problem is what else have we got in europe? ,here is no internal demand that is clear at this stage and you're not getting big government investment programs and all you have is net trade so you have to hope that this lower dollar that hasn't come down by that much is going to have a dramatic effect. growthe need to see big revaluations. >> parity would be big. before we go, at the top of the agenda? >> a lot of people will pay
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cametion to this, euro into effect in january and it'll start having an effect early next year and today we get an early indication from the european court of justice at the u.k. case to overturn that and i expect a lot of people will be paying attention to that story. with the weather outside a little frightful, it is not too bad, will be talking about wellington boots. >> if you make wellington boots a profitable business -- >> the question is how much more profitable can you make it and how much more fashionable. we'll talk to james suess. >> that is so guy johnson isn't it? ,"at is it for "on the move stay tuned for "the pulse." big news from germany and france. look out for that as we had to the break here is a picture of
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the markets. we are lower across the board. the dax up by 50 points and call it 0.5% lower. you can follow me on twitter. good luck for the rest of your day. ♪
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>> manufacturing hits the brakes. data from germany and france adds to evidence of a european slowdown. london waits for the news on its legal challenge to brussels. and, landing delta. airbus looks set to win a $13 billion deal from the u.s. carrier. as expected, we are just getting data out from the eurozone. that, i am guy johnson.


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